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2016 MarsdenLR 1926

HIGH COURT MALAYA KUALA LUMPUR
PUBLIC BANK BERHAD – Appellant
Versus
PAUL CHEAH & ASSOCIATES (ENCLS 71 & 91) – Respondent
[Civil Suit No: D-22NCC-165-2011]



Liability under partnership law persists regardless of a partner's lack of knowledge of wrongful acts committed before their partnership.

Headnote:The Plaintiff sought leave to execute a judgment against partners of the Defendant based on neglect and fraud, citing partnership liability under s 12 of the Partnership Act 1961. The court affirmed that LCH, as a partner at the time of the wrongdoing, is liable for the fraudulent actions of another partner, despite his claims of not being informed of the judgment and alleged breach of natural justice. The court dismissed LCH's arguments and upheld the Plaintiff’s application for leave to execute judgment against all partners. The final ruling allowed the Plaintiff's application, dismissing LCH's attempt to strike out.

Table of Content
1. overview of plaintiff's notice of application and related affidavits. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. facts establish the context of negligence and fraud leading to the judgment. (Para 7 , 8)
3. parties' arguments for and against the application for leave to execute judgment. (Para 9 , 10 , 11)
4. court's reasoning on partnership liability and breach of natural justice allegations. (Para 12 , 13 , 16 , 17)
5. legal principles concerning notice, cause of action, and partnership liability. (Para 18 , 19 , 22)
Lau Bee Lan J:

Introduction

[1] Enclosure 71 ('encl 71') is the Plaintiff's Notice of Application for the following orders:

(a) that the Plaintiff be given leave to execute the Judgment herein dated 30 November 2012 ('the Judgment') vide bankruptcy action pursuant to O 77 r 5(4) of the Rules of 2012 (' ROC 2012') against the following individuals who were the partners of the Defendant-

(i) Sulaiman Bin Mohd Said (I/C No: 500218-06-5263);

(ii) Lee Choon Hei;

(iii) Venu Nair; and

(iv) Tan Lyn Seang Frankie (I/C No: 651102-02-5313)

(b) Costs of this application to be borne by the partners of the Defendant; and

(c) Further and/or other relief which the Court deems fit and just in the circumstances.

[2] Consequently, Mr Lee Choon Hei filed his Notice of Application in Enclosure 91 ('encl 91') to strike out the Plaintiff's claim in encl71 against him being the former partner of the Defendant. Both encl 71 and encl 91 were heard together.

[3] Having considered the Written cum Oral Submissions of the parties, on 26 August 2015, I had allowed encl 71 and ordered the following costs:

(a) Cost of RM4,000.00 each to be paid by Mr Lee Choon Hei and Mr Venu Nair;

(b) Cost of RM3,000.00 to be paid by Mr Sulaiman Bin Mohd Said; and

(c) Cost of RM2,000.00 to be paid by Mr Tan Lyn Seang Frankie.

In respect of encl 91, I had dismissed the same with cost of RM3,000.00 to be paid by Mr Lee Choon Hei.

[4] Vide the respective Notices of Appeal filed on 4 September 2015 and 8 September 2015, Mr Lee Choon Hei ('LCH') is now appealing against the decision of allowing encl 71 and for dismissing encl 91. The reasons for my decision are set out below.

[5] In this proceeding, the following Affidavits were filed in relation to encl 71-

(a) Plaintiff's Affidavit In Support affirmed by Liza Binti Megat Jamil on 24 October 2014 ('encl 72');

(b) Affidavit In Reply of LCH affirmed by him on 11 December 2014 ('encl 76');

(c) Plaintiff's Affidavit In Reply affirmed by Liza Binti Megat Jamil on 30 December 2014 ('encl77');

(d) 2nd Affidavit In Reply of LCH affirmed by him on 15 January 2015 ('encl 84');

(e) Affidavit In Reply of Sulaiman Bin Mohd Said affirmed by him on 15 January 2015 ('encl 86');

(f) Affidavit In Reply of Venu Nair affirmed by him on 21 January 2015 ('encl 94');

(g) Plaintiff's 2nd Affidavit In Reply affirmed by Liza Binti Megat Jamil on 30 January 2015 ('encl 99');

(h) Plaintiff's Affidavit In Reply affirmed by Liza Binti Megat Jamil on 4 February 2015 ('encl 101');

(i) Plaintiff's Affidavit In Reply affirmed by Liza Binti Megat Jamil on 4 February 2015 ('encl 102');

(j) Additional Affidavit of LCH affirmed by him on 23 February 2015 ('encl 110') (leave to file additional affidavit was allowed on 17 February 2015); and

(k) Plaintiff's 3rd Affidavit In Reply affirmed by Chandramalar Devi Ramasamy Tommy Rudd on 3 March 2015 ('encl 115').

[6] Accordingly, the following Affidavits were filed in relation to encl91 -

(a) Applicant's Affidavit In Support affirmed by LCH on 19 January 2015 ('encl 90');

(b) Plaintiff's Affidavit In Reply affirmed by Liza Binti Megat Jamil on 4 February 2015 ('encl 100');

(c) Affidavit in Reply of LCH affirmed by him on 6 February 2015 ('encl 104');

(d) Additional Affidavit of LCH affirmed by him on 23 February 2015 ('encl 112'); and

(e) Plaintiff's 3rd Affidavit In Reply affirmed by Chandramalar Devi Ramasamy Tommy Rudd on 3 March 2015 ('encl 115').

Facts Of The Case

[7] The Plaintiff herein had successfully obtained the Judgment after ful

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